Elon breaks ground on 1st Tesla factory outside US

NEW YORK (BBC News): Tesla boss
Elon Musk has broken ground at a new factory in Shanghai, the electric
carmaker’s first manufacturing plant outside the US.

The facility will produce Model 3
and Model Y cars as it pushes to grow its presence in the world’s largest car
market. The American automaker faces rising competition from local rivals in
China.

But the new factory would help
Tesla avoid US tariffs on car imports into the country.

In a series of tweets on Monday,
Mr Musk said plant would build “affordable versions” of the Tesla Model 3 – the
carmaker’s mass market vehicle – and its proposed Model Y for the Greater China
region. He said the so-called Gigafactory – which could cost as much as $5bn
(£4bn) according to reports – would start Model 3 production at the end of
year.

“Aiming to finish initial
construction this summer, start Model 3 production end of year [and] reach high
volume production next year” the entrepreneur tweeted.

The push into China comes amid
simmering trade tensions between Beijing and Washington. US carmakers have been
vocal critics of President Donald Trump’s tariffs, which have targeted the car
sector among others.

In October, Tesla warned that
tariffs in China were creating challenges. China has raised import duties on
US-made cars as part of the broader trade fight with the US. At the time, Tesla
said the costs that go into its cars are roughly 55% to 60% higher than for local
firms, when tariffs and sea transport costs are take into account.

Negotiations aimed at resolving
the bitter trade dispute between US and China taking place in Beijing this
week.